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2016 (11) TMI 422 - CESTAT MUMBAICenvat credit on Capital goods when Cenvat credit availed as well as claimed depreciation - subsequent reversal of Cenvat credit and depreciation by issuing voucher - Penalty imposed - Held that:- Adjudicating authority has not properly examined the facts that whether depreciation initially claimed by the appellant have been reversed and finally not claimed in their balance sheet. If the depreciation has not been claimed in the balance sheet even though initially it was claimed, Cenvat Credit cannot be denied. However it appears from the order that this aspect has not been examined by the Adjudicating Authority. As regard the imposition of penalty, find that not only in the show cause notice but in the Adjudication order also demand confirmed under Section 11A for an amount of ₹ 7,091/- whereas penalty under Section 11AC was imposed for an amount of ₹ 4,49,357/-. Penalty under Section 11AC can only be imposed when the duty demand is determined under Section 11A(1). In the present case the duty determined under Section 11A(1) is limited to ₹ 7,091/- therefore penalty over and above this amount is not sustainable as the same is not corresponding to any amount of duty determined under Section 11A(1). However issue of admissibility of Cenvat credit is yet to be decided by the Adjudicating authority. In view of my above observations penalty if at all, is imposable it is to be commensurate to the duty if any confirmed. This matter needs to be remanded.
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